In four years one will see India’s total data center capacity reaching 5.1 million square feet. Research firm Gartner says that the data center industry of the country is projected to grow by 31 percent from 2007 to 2012. The industry will double its capacity in the next two years.

“There has been a significant increase in storage demand in India, growing from one petabyte in 2001 to more than 34 petabytes in 2007, thereby increasing the data center uptake in companies,” says Nareshchandra Singh, Principal Research Analyst, Gartner.

Data center growth will be driven by increasing domestic requirements from sectors such as financial institutions, telecom operators, manufacturing and services. While large financial institutions and telecom companies are likely to build data centers for hosting their growing data storage needs, data center hosting providers will also put significant investments into growing their capacities to fulfill the demand arising from small and midsize users.

However, the security concerns and data retention worries are among the obstacles for the development of data centers in the country.